I have two decades of experience trading currencies and fixed income instruments. My market analysis skills were honed during my tenure as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006 as Chief Currency Analyst, I have been publishing a daily commentary on global markets. I lead a team with 24/7 North America, Asia and Europe forex market coverage. Born in Dublin, Ireland, I hold a degree in Economics and Finance from Trinity College Dublin.

The Top Ten Factors Affecting Forex, Bonds, and Equities

There are a myriad of factors impacting the rise and fall of financial instruments. These are today’s top 10 foreign exchange (forex) traders and investors may wish to bear in mind during these fiscally turbulent times:

Risk appetite has been an improving trend since the end of August

A combination of an easing of global tensions surrounding Syria and encouraging economic data has helped to shore up worldwide investor sentiment. Analysts note that the Baltic Dry Index has rallied in recent days, pointing to an improvement in global growth prospects in the months ahead.

Chinese Premier Li Keqiang said the foundations of a growth rebound are not solid

China’s leader has cautioned that stimulus will not help resolve deep-rooted issues in the world’s second-largest economy. He reiterated recently that China would push forward interest rate and exchange rate reforms, as well as the internationalization of the Yuan, while promoting the currency’s convertibility under the capital account. The People’s Bank of China fixed USD/CNY to a record low of 6.1575 overnight.

The Reserve Bank of New Zealand grows more hawkish

The RBNZ reiterated its guidance to keep rates unchanged this year as expected, but added a more explicit tightening bias with a comment that “Overnight Cash Rate increases will be required next year.” Kiwi policymakers have brought forward their expected timing for the first hike to June, 2014, from September, 2014, and raised its 90-day interest rate projections by +20bps to +50bps across the forecast horizon. There were no attempts to talk down the NZD in the communiqué (0.8134).

Weak employment data Down Under

Australia’s employment data surprised many with a weak reading, falling -10.8k last month versus consensus for a +10k gain. The details were also disconcerting: full-time employment fell -2.6k pushing the unemployment rate to a four-year high of +5.8% from 5.7% in July, while the labor participation rate dropped to 65% from 65.1% (0.9232).

The Bank of England’s forward guidance

The Executive Director of the BoE, Paul Fisher, insists that the Bank’s “forward guidance” policy will support the British economy by making existing monetary stimulus more efficient. Governor Mark Carney says that the message is understood. The rally that made the GBP the best-performing major currency of the past six months is again gathering momentum as the U.K. economy continues to defy skeptics and analysts alike (£1.5812). Meanwhile, Eurozone Industrial Output fell sharply in July to its lowest level in three years (-1.5%), raising new questions about the currency bloc’s ability to keep a modest economic recovery alive – EUR falls from 1.33.

U.S. Treasury yields have lost some upside momentum

Though tapering worries have eased (10′s +2.894%), in-turn providing relief to risk assets including emerging market currencies, the USD continues to lose ground and it looks vulnerable to further slippage.

Gold prices have lost most of their allure

Insofar as safer retreats go, gold sits at $1,340, down -$78 in the last 10 days. Thank the diplomatic efforts between the U.S. and Mother Russia over the calamity in Syria for the drop. U.S. Secretary of State, John Kerry, is to meet Russia’s Foreign Minister, Sergei Lavrov, later today in Switzerland to weigh Russia’s proposal for removing stockpiles of chemical weapons in Syria and placing them under international control.

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